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Keep Eyes on Export Markets

Export markets help drive cattle prices, but it is important to understand what foreign consumers want.

Randy Blach

Randy Blach, CEO of CattleFax in Denver, Colo., said exports are a crucial part of calf prices.

The effect of U.S. beef exports on calf prices continues to increase as experts advise ranchers to stay abreast of trade developments globally.


Randy Blach, CEO of CattleFax in Denver, Colo., told attendees at the Texas A&M Beef Cattle Short Course in College Station that exports have become an integral part of calf prices and, following the latest trade discussions, are imperative when formulating marketing plans.


“Just look at how fast our export markets have grown since Christmas 2003, when we had BSE (bovine spongiform encephalopathy),” Blach said. “We have the opportunity for that value to go as high $500.”


Those prospects are fueled by a strong economy and consumer demand, he said.


“Consumers across the world want what you produce, which is a safe, reliable, wholesome, high-quality product,” Blach said. “As we look down the road, I want you to be thinking, ‘Are you doing everything you should be doing to deliver the best product?’”


To put the importance of beef export markets into perspective, Blach said the United States exports 17 billion pounds (lb.) of beef worth $18 billion.


“That’s $365 in value of the calf you are producing,” he said. “We’ve really got to keep an eye on these trade situations.”


Industry experts note consumers want more protein at a record pace.


“We will have record meat consumption in 2019 in the U.S.,” Blach said. “Never in our history have we consumed more red meat, pork and poultry than we are now. People are eating livestock protein.”


Randy Blach

Jason Cleere, coordinator of the Texas A&M Beef Cattle Short Course and Texas A&M AgriLife Extension Service beef cattle specialist, said China is encouraging people to eat more red meat.

Jason Cleere, Texas A&M AgriLife Extension Service beef cattle specialist, College Station, and Kelley Sullivan, co-owner of Santa Rosa Ranch in Navasota and Crockett, discussed China markets and their potential. Both serve on the Texas Beef Council board of directors and were part of recent visits to China and Japan to learn more about opportunities in trade and share educational programming with representatives in those countries.


“China is encouraging people to eat more red meat,” Cleere said. “There are 93 people per square mile. Beijing has 22 million people. By comparison, Houston has 6.3 million people.”


A dense population is creating more opportunity for U.S. beef in China as the combination of online and offline retail shopping trends continue. E-commerce continues to drive a majority of the market. With so many people, living quarters are primarily high-rise apartments with small square footage.


“They don’t have an oven. They have a Hibachi-type grill and like a very thin-sliced beef product,” Cleere said. “We need to think about how do we tap into that market with the products we produce.”


Sullivan touted the value of undesirable beef carcass parts in the United States that are in great demand in Japan and other parts of the world.


“About $165 to $170 of the check you get from the sale of a calf comes from that export market,” Sullivan said. “Where that’s coming from are the parts we don’t like, such as beef tongue. In the U.S., we pay $1 a pound; in Japan, $6 a pound. Beef intestine — in the U.S. there’s zero value, but it’s $1.50 a pound in Japan. It’s critical to have those export markets.”

 

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Editor’s Note: Blair Fannin is a media relationship specialist with Texas A&M AgriLife Extension Service.



 

 

 

 

 

 





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